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If you are a partner in a Limited Liability Partnership (LLP), filing your Income Tax Return is required disclose income which you get from LLP. Your share of profit from the LLP may be exempt from tax in your hands, but that does not mean you can skip filing your return. Apart from profit share, you may be receiving remuneration, interest on capital, or income from other sources like rent or capital gains. The Income Tax Department expects full disclosure and non compliance can lead to notices, penalties, or worse – scrutiny.
This blog will guide you through the process of ITR filing for LLP partners, explain which ITR form is applicable, what income to include, and the deductions you can claim. Whether your LLP is in its early stages or already growing, staying compliant keeps you safe and your records clean.
Latest updates
- ITR filing Due date for FY 2024-25 (2025-26) has been extended from 31st July 2025 to 15th September 2025
Income tax on LLP partner
Understanding the tax implications for a partner in a LLP is essential for effective financial planning and ITR filing. Here is a comprehensive guide on the taxability of an LLP partner in India.
Income Sources for an LLP Partner
Partners in an LLP can earn income through various sources, primarily categorized as:
- Salary, Bonus, Commission, or Remuneration: Payments made to partners for their services.
- Share of Profit: The portion of the LLP’s profit allocated to the partners.
- Interest on Capital: Interest earned on the capital contributed by the partners to the LLP.
Tax Treatment of Different Income Sources
1. Salary, Bonus, Commission, or Remuneration
Any salary, bonus, commission, or remuneration received by a partner from the LLP is treated as Income from Business or Profession in the partner’s hands. This amount is taxable at the individual’s applicable income tax slab rate. For the LLP, this payment is allowed as a deduction, but only within the limits prescribed under Section 40(b) of the Income Tax Act. Any amount paid beyond the specified limit is disallowed as an expense for the LLP and may result in higher tax liability for the firm.
2. Share of Profit
The share of profit received by a partner from the LLP is exempt from income tax in the partner’s hands. This exemption is provided under Section 10(2A) of the Income Tax Act. Since the LLP already pays tax on its total income, the profit distributed to partners does not attract tax again. However, it is still required to be reported in the ITR under exempt income.
3. Interest on Capital
Interest paid by the LLP to its partners on their capital contribution is taxable as Income from Business or Profession. This income is taxed in the hands of the partner at their applicable slab rate. From the LLP’s side, interest on capital is allowed as a deductible expense, subject to a cap of 12 percent per annum. Any interest exceeding this limit is not deductible while computing the LLP’s income.
What are Deductions and exemptions available to LLP partner?
Exemption under Section 10(2A) for share of profit received from the LLP.
Remuneration, interest on capital, and commission received from the LLP are taxable, but any related expenses incurred to earn this income can be claimed as deductions under Income from Business or Profession.
Deduction under Section 80C for investments like life insurance premium, ELSS, PPF, etc., up to Rs. 1.5 lakh.
Deduction under Section 80CCD(1B) for contributions to the National Pension Scheme (NPS), up to Rs. 50,000.
Deduction under Section 80D for medical insurance premiums paid for self and family.
Deduction under Section 80E for interest on education loans.
Deduction under Section 80TTA for interest earned on savings account, up to Rs. 10,000 (if applicable).
Deduction under Section 80G for donations made to eligible charitable institutions.
Income tax slab rates for LLP Partner
Old tax Regime
| Income | Tax rates |
| Upto ₹ 2.50 lakh | 0% |
| ₹ 2.50 lakh – ₹ 5 lakh | 5% |
| ₹ 5 lakh – ₹ 10 lakh | 20% |
| Above ₹ 10 lakh | 30% |
You Can claim deduction under Section 80C, 80D, 80G, etc
For senior citizen (age between 60 & 80 years), tax rate is 0% upto ₹ 3 lakhs. Rest of the rates are same.
For super senior citizen (age above 80 years), tax rate is 0% upto ₹ 5 lakhs. Rest of the rates are same.
In Old tax regime, a maximum tax rebate under section 87A of Rs. 12,500 is available for income upto Rs. 5 lakhs meaning your income is totally tax free till Rs. 5 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 23-24)
| Income | Tax rates |
| Upto ₹ 3 lakh | 0% |
| ₹ 3 lakh – ₹ 6 lakh | 5% |
| ₹ 6 lakh – ₹ 9 lakh | 10% |
| ₹ 9 lakh – ₹ 12 lakh | 15% |
| ₹ 12 lakh – ₹ 15 lakh | 20% |
| More than ₹ 15 lakh | 30% |
New tax Regime (FY 24-25)
Income | Tax Rate |
Upto ₹ 3 lakh | 0% |
₹ 3 lakh – ₹ 7 lakh | 5% |
₹ 7 lakh – ₹ 10 lakh | 10% |
₹ 10 lakh – ₹ 12 lakh | 15% |
₹ 12 lakh – ₹ 15 lakh | 20% |
Above ₹ 15 lakh | 30% |
New tax Regime (FY 25-26)
| Income Range (₹) | Tax Rate |
|---|---|
| Upto ₹ 4 lakh | Nil |
| ₹ 4 lakh – ₹ 8 lakh | 5% |
| ₹ 8 lakh – ₹ 12 lakh | 10% |
| ₹ 12 lakh – ₹ 16 lakh | 15% |
| ₹ 20 lakh – ₹ 20 lakh | 20% |
| ₹ 20 lakh – ₹ 24 lakh | 25% |
| Above ₹ 24 lakh | 30% |
Which ITR form is applicable to LLP partner?
If you are a partner in an LLP, the applicable ITR form is generally ITR-3. This form is meant for individuals and Hindu Undivided Families (HUFs) who have income from proprietary business or profession. Since the remuneration, interest on capital, and commission received from the LLP are treated as income from business or profession, you are required to file ITR-3.
If your only income from the LLP is the exempt share of profit and you do not receive any remuneration or interest, then depending on your other income sources, ITR-2 may be applicable. However, in most cases, ITR-3 is the correct form for LLP partners.
Benefits of ITR Filing for LLP Partner
Ensures income tax complaince and avoids penalties under the Income Tax Act
Helps in maintaining clean financial records for future reference
Mandatory for claiming refunds of excess TDS deducted on income
Required for applying for home loan, business loan, personal loan, credit card, term insurance, etc
Useful while applying for visas or immigration purposes
Helps in carrying forward business losses or depreciation to future years
Necessary for responding to any income tax notices or assessments
Builds a reliable income history for future investment or funding opportunities
What documents are required for ITR filing for LLP partner?
- Capital account of LLP partner from LLP
- Investment proof under section 80C or proof of any other deduction
- Form 26AS and AIS
- Other relevant documents depending on income sources
Process of ITR filing for LLP Partner
Filing your income tax return as an LLP partner is a straightforward process if you follow these steps on the Income Tax e-Filing Portal:
Login to the Portal
Visit www.incometax.gov.in/iec/foportal/ and log in using your PAN and password. If you do not have an account, complete the registration first.Select ‘File Income Tax Return’
On the dashboard, click on ‘e-File’ and choose ‘Income Tax Return’. Select the relevant assessment year (for example, AY 2025–26 for FY 2024–25).Choose the Mode of Filing
Select ‘Online’ if you want to file directly on the portal. For offline filing using utility, download the applicable utility (Java/Excel/JSON) and upload the final file later.Select Status and ITR Form
Choose your filing status as Individual and select the correct form, typically ITR-3, if you receive remuneration, commission, or interest from the LLP. If you only have exempt share of profit and no business income, ITR-2 may be sufficient.Fill in the Required Details
Personal Information
Bank Details
Income Details: Include remuneration, interest, and share of profit from LLP (under exempt income section).
Deductions under Chapter VI-A: Claim deductions like 80C, 80D, etc.
TDS Details: Validate Form 26AS and prefilled TDS credits.
Compute Total Tax Liability
The system will calculate your total tax payable or refundable after considering your income, deductions, and TDS.Validate and Preview
Check all entries thoroughly. Use ‘Preview Return’ to verify all figures before submission.Submit and E-Verify
Submit the ITR and complete e-verification using any of the following options:Aadhaar OTP
Net banking
EVC through bank account
Digital Signature Certificate (DSC) (mandatory if accounts are audited)
Acknowledgment
Once e-verified, your return will be processed. You will receive ITR-V (Acknowledgment) and can track the status from your dashboard.
For LLP partners with high income or business-related claims, it is advisable to maintain proper documents and consult a CA if needed.
What is the Due date of ITR filing for LLP partner?
LLPs Not Requiring Audit: If the LLP does not require an audit under the Income Tax Act or LLP Act, the due date for filing the ITR is July 31 of the assessment year.
LLPs Requiring Audit: If the LLP is subject to audit under the Income Tax Act or LLP Act, the due date for filing the ITR is October 31 of the assessment year.
In case you have missed this deadline then you can file belated ITR till 31st December with late fees.
Also for any mistake made while filing ITR, you can make corrections by filing Revised ITR any number of times till 31st December.
If you miss deadline of Belated income tax return filing then you can file Updated ITR till 4 years from the end of relevant assessment year with late fees and additional taxes.
What are the Consequences of non-payment of Tax and non-filing of ITR?
Failing to pay taxes and file your Income Tax Return (ITR) has severe consequences. Firstly, unreported income is deemed illegal, equating to tax evasion, and can result in a penalty of 100% to 300% of the evaded tax under Section 271(C). Secondly, a penalty ranging from 10% to 90% of the undisclosed amount may be imposed under Section 271AAB, depending on the circumstances. Lastly, if you miss the filing deadline, a 1% interest per month or part thereof will be charged on the unpaid tax amount as per Section 234A.
Looking for help?
Need help filing your ITR as an LLP partner? Let A R Dhorajiya & Co. take care of it. From selecting the right form to accurate reporting of income and deductions, we handle the entire process for you. Get timely, compliant, and hassle-free filing with expert guidance.
Contact us today at +91 9769647582 for a consultation or to get started with your ITR filing
Frequently Asked Questions
No, ITR-4 is not applicable for LLP partners who receive remuneration, commission, or interest from the LLP. These are treated as business income, which requires filing ITR-3. ITR-4 is only for individuals and HUFs under the presumptive taxation scheme, not for partners receiving active income from an LLP.
LLP partners need to file ITR-3 through the Income Tax e-Filing portal. After logging in, select the applicable assessment year, choose ITR-3, and enter details of income from business or profession, including remuneration, interest, and exempt share of profit. Complete the return, verify it online, and submit.
ITR-4 is used by individuals, HUFs, and firms (other than LLPs) opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE. ITR-3 is used by individuals and HUFs having income from business or profession, including partners in an LLP receiving remuneration, interest, or commission.
ITR-3 is applicable for partners receiving remuneration, commission, or interest from an LLP, as these are considered income from business or profession under the Income Tax Act.
The maximum allowable remuneration to LLP partners is governed by Section 40(b) of the Income Tax Act and depends on the book profit of the LLP:
On the first Rs. 3 lakhs of book profit or in case of a loss: Rs. 1.5 lakhs or 90% of book profit, whichever is higher
On the balance of book profit: 60% of the remaining amount
Yes, salary, bonus, or commission received by a partner from an LLP is taxable under the head “Income from Business or Profession” and is subject to the applicable income tax slab rates of the individual partner.
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